Ask Dr. LJ

[bluegargantua]

Hey Dr. LJ (economy degree)

I've got this IRA with my bank. I opened it when I switched jobs and dumped my paltry 401(k) money into it. It was worth about $500.

Today, the bank started charging "maintenance fees" and pulled $40 out.

So, here's the deal. Obviously, I need to do something with the money. It will never earn enough to offset the fees. In the past, I've been told that I can't roll this cash into my current 401(k) -- and consolidating my retirement savings this way is what I'd really like to do.

I don't want to just cash it in because first they tax you 20% for early withdrawal and what's left over gets taxed again as income which probably means I'd get nothing out of it.

What can I do with this stupidly small sum of cash?

Thanks
Tom

Comments

[foxtown.livejournal.com]

Are you sure that $40 is due to fees? Could some of it be due to the loan issues? If the money was in Money Markets then that is a chance.

401K to 401K is fine to roll-over, but there is a time limit and as I recall IRA is totally seperate from 401Ks, so I think you are screwed there.

Also Roths are completely different from regular IRAs so no roll over there either.

So the best option is to find a better bank, and I hath heard good things about ING Direct, but I am sure there are others. Just make sure that you put it in index funds (Vanguard has good ones), since those are the most efficient in the long run. The Money Markets are taking a beating at the moment.

[bluegargantua]

The bill made it clear that the loss was strictly fee-related and not because the fund sucks or something.

Yes IRA != compatible with 401(k) == extremely irritating.

I have an ING account so I guess I'll check it out.

Thanks!
Tom

[foxtown.livejournal.com]

The other option is to put some more money in. A lot of places will charge extra for less money. You may want to call your current bank to see if that is what happened.